In early 2016, Canada’s Minister of Finance convened the Advisory Council on Economic Growth to examine the long-term potential of Canada’s economy. In February 2017, the Council released a series of reports with their recommendations for improving the prospects for inclusive economic growth in Canada.

Of their five interlocking recommendations to accelerate innovation and help more Canadian start-ups and SME’s achieve scale, they stated that Canada should build a value-added growth capital strategy focused on Canada’s fastest-growing firms. These initiatives would help Canada raise its global competitiveness, achieve inclusive growth goals and create a more resilient economy and labour force.

One of the fundamental problems they noted with Canadian innovation is that entrepreneurs are good at launching companies, but very few achieve significant scale. The reasons noted include a small and fragmented local market, shortages of experienced business talent, a lack of at-scale sources of growth capital, and an aversion to risk on the part of some of Canada’s established companies.

Part of this challenge in achieving growth is finding and hiring experienced business talent. Canada has relatively few companies that have scaled through all stages of growth and doesn’t possess a community of large companies to train this type of talent.

Another challenge that was identified is the limited access to value-added growth capital in Canada. As compared to their peers in the United States, more than twice as many fast-growing companies in Canada cited insufficient access to risk capital as their greatest concern. Learn more about CBGF’s history.

We have a strong track record of investing in businesses that are ready for the next phase of their growth journey, but many companies are not set up to handle significant growth. CBGF provides value to its partner companies right away by uncovering gaps and identifying areas for bolstering operations, governance and financial reporting during due diligence. This is the first opportunity for CBGF to demonstrate our collaborative approach, where our findings will dictate our value-add focus areas post-investment. For example, businesses may not have a well-structured Board or governance process, clearly defined roles and responsibilities at the management team level which are imperative for a well-run business, or may be lacking in its systems and data collection and reporting. Our experience scaling businesses helps entrepreneurs and management teams understand what it takes to unlock the next phase of growth for their business.

We can be flexible with our structures to suit the company’s situation. We can invest via preferred shares, common shares, convertible shares, debt or notes. We typically seek a board or observer seat and certain minority shareholder protections.

We are unique in that we have a broad industry focus. We want to help growing Canadian companies driven by ambitious management teams. CBGF has invested in several sectors including Consumer Discretionary, Information Technology, Industrials, Health Care, Financial Services, Education, Consumer Staples, Business and Communication Services and more.

Yes, our goal is to do what’s best for the company. We are happy to work with other investors with similar goals and aspirations.CBGF can lead or participate with others in transactions. CBGF can lead or participate with others in transactions.

CBGF’s mission is to invest in existing businesses that have strong entrepreneurial and management leadership, established customer bases, strong operations and a record of profitability, or a clear near-term path to profitability.

For clarity, the Fund is not targeting early-stage companies. We will evaluate and invest in companies that may not yet generate positive cash flow, but have a proven business model, run rate revenues over $5 million, and a clear near-term path (within 12-24 months) to profitability. Many established companies are prioritizing growth over short-term profit and are investing heavily in their business (e.g. product development, scaling their team, and sales marketing) to capitalize on their growth opportunity. When screening investment opportunities that are not generating positive cash flow, we spend a significant amount of time to understand its business model, the riskiness of its revenue streams, and the demonstrated path to profitability before an investment is made.